Latest / The Stable Pulse / Stablecoins for the Age of AI w/ Jacqueline Reses

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Stablecoins for the Age of AI w/ Jacqueline Reses · The Stable Pulse

• 0:04
  Nik Milanović: For those of you who don't know me, my name is Nick Milanovich.
• 0:07
  Nik Milanović: I'm the uh founder over at Stablecon.
• 0:09
  Nik Milanović: I wanna introduce our fantastic panelists today.
• 0:13
  Nik Milanović: Jackie Resus is joining us, is the chairman, CEO, and co-founder of Lead Bank.
• 0:21
  Nik Milanović: If you haven't heard of Lead Bank, you're probably at the wrong event.
• 0:23
  Nik Milanović: I'm gonna guess that 95% of the people in this room have heard of Lead and what they're doing.
• 0:28
  Nik Milanović: So we're gonna sit down and hear a little bit about the federal framework that they just proposed for a GenTic Finance, and there's a big stablecoin component there.
• 0:36
  Nik Milanović: So without further ado, Jackie, thank you so much for joining us.
• 0:41
  Jacqueline Reses: I think that's on.
• 0:42
  Jacqueline Reses: We're we're good.
• 0:44
  Jacqueline Reses: We're good.
• 0:45
  Jacqueline Reses: How is everyone?
• 0:48
  Jacqueline Reses: We're off to a good start.
• 0:51
  Jacqueline Reses: Exactly.
• 0:52
  Jacqueline Reses: Exactly.
• 0:53
  Nik Milanović: Well, if you're in the back, push up forward.
• 0:55
  Nik Milanović: You're gonna get a lot of alpha out of this conversation alone.
• 0:58
  Nik Milanović: But Jackie, for people who don't know you, which should be the vast minority of people in this room, can we get a quick background on all of your accolades?
• 1:04
  Nik Milanović: I feel like I wouldn't do it justice.
• 1:06
  Jacqueline Reses: Uh well, I uh own and run and have co-founded a company called Lead Bank.
• 1:13
  Jacqueline Reses: We're a banking infrastructure company.
• 1:16
  Jacqueline Reses: Before that, I worked at Square, ran financial services, kind of banking lending.
• 1:21
  Jacqueline Reses: I did something in 2015 that very few people did at the time, which is I built a bank and a tech company.
• 1:27
  Jacqueline Reses: And it took about 10 years later for the next person to do that.
• 1:31
  Jacqueline Reses: Um worked in tech my entire career, been involved with a Federal Reserve of San Francisco and Kansas City.
• 1:39
  Jacqueline Reses: And um three kids live in California.
• 1:45
  Nik Milanović: Well, you say you worked at Square, but you built a lot of Square and Square Capital, if I'm not correct mistaken.
• 1:50
  Jacqueline Reses: So I build financial services products at Square, like banking, lending, credit card, debit card.
• 1:58
  Jacqueline Reses: Um now, like the lending business is incredible.
• 2:01
  Jacqueline Reses: I think it hit$200 billion of loan originations, which is incredible.
• 2:06
  Jacqueline Reses: And it but the thing I find fascinating about that, it was a Hack Week project.
• 2:10
  Jacqueline Reses: And so it was created by folks at Square who had started this hack week.
• 2:16
  Jacqueline Reses: They realized they were onto something, and then we helped commercialize it and build it into what's now a massive, massive business for block.
• 2:26
  Jacqueline Reses: So and it I think it also kind of created a broader industry for algorithmic lending.
• 2:32
  Jacqueline Reses: And so we, for example, Hamam, my co-founder, helped socialize how algorithmic lending works to the FDIC.
• 2:42
  Jacqueline Reses: So we spent two years working on that.
• 2:44
  Jacqueline Reses: And at the time, now it seems like ancient history, but at the time it was very controversial.
• 2:52
  Jacqueline Reses: And the idea of using cash flow data was not something perceived as a constructive and healthy way to underwrite loans.
• 3:01
  Jacqueline Reses: And so we helped convince regulators that that was actually a good thing.
• 3:05
  Jacqueline Reses: And it's widely seen as the gold standard today until AI transformer models have replaced a lot of what was done in that era.
• 3:15
  Nik Milanović: Well, that's what we're here to talk about today.
• 3:17
  Nik Milanović: Uh that's Square Capital, the product line you're talking about, right?
• 3:20
  Jacqueline Reses: Yeah, yeah, yeah.
• 3:21
  Nik Milanović: I used to work with Ariana Persartip, and she familiarized with you how many file is the best.
• 3:27
  Nik Milanović: Great team.
• 3:31
  Nik Milanović: Lead, I know you've just passed a number of recent milestones.
• 3:36
  Nik Milanović: Um what does Lead Bank do for people in the room?
• 3:39
  Nik Milanović: I'm not I wouldn't be surprised if there are a couple of prospective customers in here.
• 3:42
  Jacqueline Reses: So Lead builds banking infrastructure.
• 3:45
  Jacqueline Reses: So APIs that help embed any financial products into your systems.
• 3:53
  Jacqueline Reses: So it's a combination of APIs and compliance services that help make that a very easy set of products and processes in order to make companies get up and running with financial services.
• 4:06
  Jacqueline Reses: And so our products are things like lending, money movement, stablecoin infrastructure, agentic infrastructure, issuing, um, accounts, but those products have been completely deconstructed for an agentic world so that you they're built in a kind of bottoms-up deconstructed way.
• 4:31
  Jacqueline Reses: So if anybody is building a banking product, we've made it very easy for them to integrate our APIs.
• 4:38
  Jacqueline Reses: They could take whatever pieces they want that makes their products more composable.
• 4:43
  Jacqueline Reses: We help them put it together, and then they're up and running in no time.
• 4:48
  Nik Milanović: This feels like the logical conclusion of the banking as a service trend that started about six years ago.
• 4:53
  Nik Milanović: You know, I you're probably the first person to want to introduce banking to a tech company since the failed Walmart ILC application back in the early aughts, but then banking as a service exploded, and we're kind of moving away from the um I would say Nokia model of banking as a service to the Android model where you're actually breaking apart a lot of the core components of banking and getting down to the rails rather than kind of papering over existing sponsor banks.
• 5:19
  Nik Milanović: You're bringing a lot of those products to your end customers.
• 5:22
  Jacqueline Reses: So there was a moment in time, I think, related to Synapse and Evolve that really created a crisis moment around whether intermediaries were in the middle between a bank and the end product.
• 5:38
  Jacqueline Reses: And we had always argued that having an intermediary in the middle, particularly on the more regulated side, I feel differently on the pay on straight, simple, low-risk payments.
• 5:49
  Jacqueline Reses: So where you are on the regulatory spectrum actually alters that perspective.
• 5:53
  Jacqueline Reses: But on more regulated products, you don't want someone in the middle between the relationship between your bank and what you're doing.
• 6:02
  Jacqueline Reses: You want to make sure you can talk to that entity so that you could release and deal with risks associated with your products.
• 6:09
  Jacqueline Reses: And so we really have embedded ourselves in the life of our clients.
• 6:14
  Jacqueline Reses: Even when we do work with intermediaries, we end up having a direct relationship with a client anyway.
• 6:22
  Jacqueline Reses: And it becomes a tri-party agreement that we all want to kind of have a great, you know, easy-going, cohesive, and aligned relationship with each other.
• 6:32
  Nik Milanović: Yeah, I feel like now we've seen the failure mode of that disintermediation between the program manager and then the look through visibility to the end portfolio.
• 6:40
  Jacqueline Reses: Um it can work for some things, like I it it, but it's got to be pretty low-risk products.
• 6:47
  Jacqueline Reses: And it also can work where the banks are connected to the end user.
• 6:52
  Jacqueline Reses: But otherwise, I agree with you.
• 6:54
  Jacqueline Reses: It's a hard combination to dis you know, disintermediate a bank when they have to take the ultimate liability for a lot of the decisions that are being made.
• 7:04
  Nik Milanović: So when was LEED actually founded?
• 7:06
  Nik Milanović: What year?
• 7:07
  Jacqueline Reses: It was founded at the end of 2021.
• 7:11
  Jacqueline Reses: And um I was actually at Bill Ackman's house.
• 7:16
  Jacqueline Reses: And yeah, it was in the summer.
• 7:20
  Jacqueline Reses: I was in the Hamptons, and that was kind of the moment when we incorporated the company and said, like, we're doing this.
• 7:28
  Jacqueline Reses: And I basically filed the paperwork and got it all done.
• 7:33
  Jacqueline Reses: Um, and then brought my co-founders who were all working at Block at the time, and they all came at different periods of time.
• 7:42
  Jacqueline Reses: Um, and then uh we filed to get our bank license sometime mid-22.
• 7:50
  Jacqueline Reses: And I I think it's 50 days later, we got our license.
• 7:54
  Nik Milanović: And can we get a sense for what the scale is of lead today five years later?
• 7:59
  Jacqueline Reses: So we hit about 600 million of gross revenue, 611 for the year.
• 8:05
  Nik Milanović: Incredible.
• 8:06
  Jacqueline Reses: Um, and we're a very profitable company.
• 8:11
  Nik Milanović: Well, what's the Kager?
• 8:12
  Nik Milanović: Zero to 600 million over five years.
• 8:15
  Nik Milanović: That's got we're talking like high double digits, if not triple.
• 8:19
  Jacqueline Reses: Yeah, absolutely.
• 8:20
  Jacqueline Reses: I mean, it you know, we look at it, we started with a business that uh was a traditional community bank at Kansas City.
• 8:29
  Jacqueline Reses: It was an amazing bank.
• 8:30
  Jacqueline Reses: We loved it.
• 8:31
  Jacqueline Reses: And the one thing I love about Kansas City is that it's a very forward-leaning city, but in a very business-friendly state.
• 8:40
  Jacqueline Reses: And so there are a lot of things about banking law in the state of Missouri that we loved.
• 8:45
  Jacqueline Reses: And particularly owning a bank, we actually picked the charter we wanted for a very particular set of reasons.
• 8:52
  Jacqueline Reses: And um, we got very lucky by the combination of law, team, um, leadership at the company location.
• 9:01
  Jacqueline Reses: If you come to our location, it's absolutely gorgeous.
• 9:05
  Jacqueline Reses: Um, it's super nice.
• 9:07
  Jacqueline Reses: And we have the Chiefs, which is kind of fun.
• 9:10
  Jacqueline Reses: We have women's soccer in Kansas City.
• 9:14
  Jacqueline Reses: Yeah, no, I've been like red-pilled around the Chiefs, um, only because on the day of games, like not 90% of our employees are in Chiefs shirts.
• 9:26
  Jacqueline Reses: 100% of our employees are chief shirts.
• 9:29
  Nik Milanović: Well, y'all built a dynasty out there in Kansas City football, and I feel like there's a dynasty in Kansas City banking that's about to be built.
• 9:35
  Jacqueline Reses: Well, it's fun.
• 9:36
  Jacqueline Reses: We bring all of our clients out to Kansas City also.
• 9:39
  Jacqueline Reses: So we typically host people at games.
• 9:42
  Jacqueline Reses: They have a lot of fun.
• 9:43
  Jacqueline Reses: Um, and I think we're building an amazing company.
• 9:46
  Jacqueline Reses: I love the fact that it's located in the Midwest.
• 9:49
  Jacqueline Reses: We actually a few weeks ago had the labor secretary out, and we were talking about hey, I is how AI is going to impact the workforce.
• 9:58
  Jacqueline Reses: And so I think it's really notable because we could win, you know, all kinds of disruptor awards.
• 10:05
  Jacqueline Reses: And we're one of the only companies located outside of New York and San Francisco that actually wins those awards.
• 10:11
  Jacqueline Reses: And so I think that's amazing for the Midwest.
• 10:16
  Jacqueline Reses: And uh, we have an amazing employee population there.
• 10:19
  Jacqueline Reses: We run a lot of teams from there.
• 10:22
  Jacqueline Reses: We also, for digital assets, run our concierge care out of Kansas City.
• 10:28
  Jacqueline Reses: So we have a lot of people in Kansas City who work with our digital asset clients.
• 10:32
  Jacqueline Reses: Um, and so I think they have an amazing ethos to work with those clients because they are truly wonderful, happy, great colleagues.
• 10:43
  Jacqueline Reses: Um, and so I think there's a uh spirit in a choice de vie to having a great Kansas City employee base that we certainly love.
• 10:53
  Nik Milanović: Well, I respect that local pride and building out a uh a tech talent base in non-major metros, which I think just gives you access to a completely different slice of talent.
• 11:03
  Jacqueline Reses: Um, it's amazing.
• 11:05
  Jacqueline Reses: I mean, the other thing I love is that that team has learned tech.
• 11:11
  Jacqueline Reses: We have three other offices.
• 11:12
  Jacqueline Reses: We have San Francisco, Sunnyvale, and New York City.
• 11:15
  Jacqueline Reses: So we have about another 150 people in California and New York.
• 11:20
  Jacqueline Reses: And I think we've been able to cross-fertilize teams across the country to kind of get the best of both worlds.
• 11:27
  Jacqueline Reses: We have a lot of people who travel all over the, you know, back and forth.
• 11:30
  Jacqueline Reses: Makes for a really nice culture because the one thing I really, really care about is building like a really good culture for our company.
• 11:40
  Jacqueline Reses: Like I want it to be fun, I want it to be amazing, I want people to enjoy working there.
• 11:46
  Jacqueline Reses: And we do a lot of things that are very employee-friendly.
• 11:50
  Jacqueline Reses: And I think the ethos of all of those office just makes for great vibes across the offices.
• 11:57
  Nik Milanović: Well, that's important because through stable coins, you know, you're gonna have crypto talent.
• 12:01
  Nik Milanović: There is a crypto component, and it feels like the ecosystem is growing up where actually creating a good culture is a meaningful differentiator in the crypto world.
• 12:10
  Nik Milanović: There's also a big AI component.
• 12:11
  Nik Milanović: So we're recording this today.
• 12:13
  Nik Milanović: For people who aren't here in person, situational awareness.
• 12:16
  Nik Milanović: It's day one of Monday 2020, 2026.
• 12:19
  Nik Milanović: We've got a packed room from the stablecoin space, but LEED also just published a federal framework for AI and finance.
• 12:27
  Nik Milanović: I would love to hear more about this.
• 12:29
  Nik Milanović: What made what drove this decision?
• 12:31
  Jacqueline Reses: I'd say this.
• 12:32
  Jacqueline Reses: So here's our document.
• 12:33
  Jacqueline Reses: It's in paper form for this session today.
• 12:36
  Nik Milanović: Where could people find it online, by the way?
• 12:38
  Jacqueline Reses: Uh, go to our website, it's on our blog.
• 12:41
  Jacqueline Reses: And it this is not bedtime reading.
• 12:45
  Jacqueline Reses: This is not like something you would write that's scintillating, and you're sitting there like, oh my God, that's the coolest thing I've ever read.
• 12:53
  Jacqueline Reses: But we had observed um as we were building a first set of agentic commerce into our APIs, that there was no discussion around legal issues in the United States.
• 13:08
  Jacqueline Reses: And so, given that no one had actually put pen to paper in a proverbial sense, we decided that we would address the issue head on.
• 13:19
  Jacqueline Reses: So we went regulation by regulation, law by law, that impacts all of the people in this room.
• 13:27
  Jacqueline Reses: It impacts the banking system.
• 13:30
  Jacqueline Reses: And we said, how does the law or regulation need to change?
• 13:35
  Jacqueline Reses: So we categorized it, we listed what the issues are, we made a proposal.
• 13:41
  Jacqueline Reses: So we were not spineless.
• 13:43
  Jacqueline Reses: We actually made a proposal for what we think needs to change, and then we actually proposed policy text.
• 13:50
  Jacqueline Reses: And so we started the conversation in an incredible way, and then we went and socialized it with our regulators on the hill, um, with some of the largest banks in the world and with our clients so that we could start to show what needs to happen in order for all of us to be able to build a scaled business.
• 14:13
  Jacqueline Reses: I think the people in this room, and we in particular, who are very focused on agentic commerce, need to make sure that as our company scales and as the people in this room's companies scale, they're not setting themselves up for danger and for issues impacting their company that is unexpected because there's a lack of clarity.
• 14:36
  Jacqueline Reses: And so, in the same way that with stable coins, we face this set of legal hurdles where there were undefined sets of issues in stablecoin infrastructure, we basically set the framework forward.
• 14:49
  Jacqueline Reses: And then the other observation is, you know, we're sitting here listening to AI leaders navigate complex, world-changing, population-changing issues.
• 15:01
  Jacqueline Reses: I don't think that's how we're gonna solve the issues in finance.
• 15:05
  Jacqueline Reses: And the only way we're gonna do it is if we attack the vertical.
• 15:10
  Jacqueline Reses: Let the horizontal deal with their issues.
• 15:12
  Jacqueline Reses: I was gonna make sure that we attack the vertical of the banking system.
• 15:17
  Jacqueline Reses: And if you pay attention to banking, it's like one of the industries that's very comfortable with the regulation.
• 15:24
  Jacqueline Reses: We all live by rules, we live by guidelines, we all operate in a set of well-constructed rules.
• 15:30
  Jacqueline Reses: And so the idea that we would actually create a framework for how agenda commerce needs to intersect with banking laws makes tons of sense.
• 15:41
  Jacqueline Reses: And so we launched it a week ago.
• 15:44
  Jacqueline Reses: Um, I went on Squawk Box, um, I spoke at Newcomer to talk about it.
• 15:50
  Jacqueline Reses: And uh, we're here talking about it with you.
• 15:53
  Jacqueline Reses: I hope everyone goes, pulls it down, reads it.
• 15:55
  Jacqueline Reses: If you want to talk to us about it, give us a call, uh give us a call, and we'll, you know, it's it'll start the conversation.
• 16:03
  Jacqueline Reses: By the way, I also don't think we're right in everything in here.
• 16:08
  Jacqueline Reses: Like, I am not arrogant enough to say a hundred percent this is the one way that this has to be done.
• 16:16
  Jacqueline Reses: It's a start of a conversation, and I think there's probably a lot of insight that could come.
• 16:22
  Jacqueline Reses: Like just this weekend, I got an amazing email from someone at JP Morgan who sent me feedback on it.
• 16:28
  Jacqueline Reses: He was so thoughtful of him to even read it, let alone send me back comments.
• 16:34
  Jacqueline Reses: And I think it's a great way to kind of build the conversation and make sure that everyone's got a point of view about how we build the infrastructure correctly, because we really are at the dawn of these transactions.
• 16:48
  Jacqueline Reses: And even though by volume we've seen the flip-flop of machine transactions versus humans, we really don't have clarity on how this needs to operate.
• 16:58
  Nik Milanović: By the way, if you're in the back, if you're networking today, there'll be many more networking opportunities with people in this room.
• 17:04
  Nik Milanović: There's not that many opportunities to hear from one of the most interesting companies building at the intersection of the two most interesting tech trends right now stable coins and agentec finance.
• 17:15
  Jacqueline Reses: Um can can I make one comment on that?
• 17:18
  Jacqueline Reses: I think that intersection is incredibly powerful.
• 17:21
  Jacqueline Reses: Yes.
• 17:21
  Jacqueline Reses: And all the tools and infrastructure that was needed to build stablecoin infrastructure around programmability, composability is exactly the same infrastructure needed to build agenda commerce.
• 17:37
  Jacqueline Reses: And so we've been very focused on stablecoin infrastructure for the last few years.
• 17:42
  Jacqueline Reses: In fact, we were one of the only banks right after we started that was banking digital assets in such an aggressive way that we were.
• 17:50
  Jacqueline Reses: We immediately jumped in and started working with digital asset companies.
• 17:55
  Jacqueline Reses: And it's because the APIs that we were building, we knew would have the controls, the programmability of what was needed in order to kind of manage risk more thoughtfully than was being perceived.
• 18:09
  Jacqueline Reses: Because in my mind, there's a difference between check the box risk and real risks.
• 18:15
  Jacqueline Reses: And because of the way we built our APIs, we believed that we were able to manage real risk with our clients as opposed to check the box risk.
• 18:24
  Jacqueline Reses: And so when we leaned into stable coins several years ago, we now have, I'd say, one of the biggest stablecoin infrastructure businesses and banking, if not the um we then it was a natural move to start building agenda commerce APIs because a lot of the foundational work is exactly the same.
• 18:45
  Nik Milanović: I I like where you're going with this.
• 18:46
  Nik Milanović: I wanted to head in exactly the same direction.
• 18:48
  Nik Milanović: And to build on what you're saying, if you think about um some of the core features of stablecoins, okay, people intuitively understand, okay, it's faster in some circumstances, it crosses borders more easily, it's cheaper in some circumstances, but programmability is probably under focused on.
• 19:04
  Nik Milanović: And why that matters here, especially for agents, is if you think about conventional analog payment systems in the US, ACH, FedNow, um, you know, now RTP, uh, there are limitations to the information density in a transaction, how much you can encode in a transaction that tells you about that transaction.
• 19:22
  Nik Milanović: There are states that money can be in and flight where you don't actually know where it is when it's moving.
• 19:27
  Nik Milanović: Um there's limits to you can do uh push, but you can't do pull requests necessarily.
• 19:33
  Nik Milanović: There's limits to how malleable a transaction is and how much you can program in order to dictate the logic that goes into that transaction.
• 19:41
  Nik Milanović: Stablecoins solve a lot of these issues.
• 19:43
  Nik Milanović: And so why does that matter here?
• 19:44
  Nik Milanović: Well, if you think about agents as users, it's not a human that's going through a risk and control system at a bank that's pushing a button and hard-coding the information that dictates the transaction.
• 19:54
  Nik Milanović: You're talking microtransactions that are sub one cent, you're talking high velocity transactions, you're talking completely programmatic states that just break when you apply them to analog systems.
• 20:04
  Nik Milanović: So stable coins, it's funny, are now providing the digitally native payment type that will finally work for agents at play.
• 20:11
  Nik Milanović: But if you have a banking system where the primary user is not a human, it's an agent, and they're working 24-7 in very different ways than humans were, you need to completely rewrite the rule book.
• 20:21
  Nik Milanović: And I do not think that we're ready for that.
• 20:23
  Nik Milanović: So I'm very curious to hear a little bit more about how you think about that.
• 20:26
  Jacqueline Reses: Well, even the idea, like if you think about it, bounded authority is the issue that is defining agentic commerce, and it's no different than programmability of defining how money moves or what you're defining for an account structure in stablecoin infrastructure.
• 20:46
  Jacqueline Reses: It's exactly the same.
• 20:48
  Jacqueline Reses: And I think in our case, um, you know, what the only thing we're seeing today is really transactional agentic behavior.
• 20:59
  Jacqueline Reses: We're not actually seeing agentic behavior in accounts, and I think they're two very different things.
• 21:05
  Jacqueline Reses: So, in transactional agentic behavior, you're creating bounding author bounded authority and then money might move.
• 21:14
  Jacqueline Reses: That is not different programmatically from how stable coin infrastructure actually works.
• 21:21
  Jacqueline Reses: And so we saw a lot of parallels and how the two mesh together.
• 21:26
  Jacqueline Reses: And I think like I think of it as being the most significant part of blockchain technology is the programmability.
• 21:35
  Jacqueline Reses: And I think the only way to really kind of set your mind, if like if that doesn't mean anything, the contrast I always provide is if you think about a wire today, you send a wire, you don't know whether it got there, you wait for somebody to call you and say, like, hey, I didn't get your wire.
• 21:55
  Jacqueline Reses: You're like, What do you mean?
• 21:56
  Jacqueline Reses: And then they say, What's the number?
• 21:58
  Jacqueline Reses: And you go, I don't know.
• 21:59
  Jacqueline Reses: Let Me, call someone and go get the number.
• 22:02
  Jacqueline Reses: And that is not programmable money movement.
• 22:05
  Jacqueline Reses: And so it is the perfect contrast to analog digital that I could come up with that makes the explanation of what that means very illustrative.
• 22:16
  Nik Milanović: Like if you think about API calls, there's one success date and there's tens, hundreds, thousands of failure states.
• 22:22
  Nik Milanović: And today with analog payment systems, you get no information on the failure states, but they happen all the time.
• 22:28
  Jacqueline Reses: So can we talk about failure states?
• 22:31
  Jacqueline Reses: So I think the interesting thing about agentic behavior and where we have to go from a legal point of view is really dealing with failure states.
• 22:40
  Jacqueline Reses: I think everybody would love it if Muse or Instinct would move their money, access their account, do exactly what you want very quickly and efficiently.
• 22:50
  Jacqueline Reses: And it were amazing.
• 22:52
  Jacqueline Reses: Now imagine your agent acts outside your authority.
• 22:56
  Jacqueline Reses: So there are a few things that I would worry about.
• 22:58
  Jacqueline Reses: Like one, liability, two, data protection.
• 23:02
  Jacqueline Reses: Three, do you know your agent?
• 23:05
  Jacqueline Reses: Is it connected to you as the human?
• 23:07
  Jacqueline Reses: Like if you could come up with three issues that I would worry about the most, they're the three.
• 23:12
  Jacqueline Reses: And so even this idea of liability, like what happens if your agent acts outside of its authority?
• 23:20
  Jacqueline Reses: Whose fault is that now?
• 23:22
  Jacqueline Reses: What happened if the agent hallucinates?
• 23:25
  Jacqueline Reses: Is that the model company?
• 23:26
  Jacqueline Reses: And all your money gets wired out of your account.
• 23:29
  Jacqueline Reses: Whose fault is that?
• 23:31
  Jacqueline Reses: Like I am envisioning a world where those calls start to happen beyond core fraud states.
• 23:38
  Jacqueline Reses: And unless it's controlled and managed very quickly with humans in the loop first, but then we ultimately want to get to a state where humans are not in the loop, we need to manage a waterfall of what that liability looks like as an example, so that we could apportion failure to whoever the failure is related to.
• 24:00
  Jacqueline Reses: Otherwise, it's all going to be related to the consumer or the business.
• 24:05
  Jacqueline Reses: And in some cases, that could be true that you ultimately are at fault today.
• 24:10
  Jacqueline Reses: But even today, there's different states of failure that exist between like a bank and a consumer.
• 24:16
  Jacqueline Reses: And I don't know that consumers want to give up that failure state because now they're using agentic behavior.
• 24:25
  Nik Milanović: This is a very well-timed paper because it's October 2026.
• 24:29
  Nik Milanović: You've probably seen in banking news recently a number of banks have shut off MCP access.
• 24:35
  Nik Milanović: Most notably JP Morgan was in the news.
• 24:37
  Nik Milanović: Um, and while there's speculation that this is related to the BlackRock economist prediction that there will be deposit flight if agents could move money around, if you think about it from a bank's perspective, like there are real liability concerns.
• 24:49
  Nik Milanović: Like you said, KYA, data protection, and liability are three big issues facing banks.
• 24:54
  Nik Milanović: And we don't know from the banking perspective what your liability is going to be if you allow agent access to your platform.
• 25:00
  Nik Milanović: But obviously, long-term, shutting off MCP access is just not a viable solution.
• 25:05
  Nik Milanović: You're going to have more and more customers that choose to use agents to interface with banks.
• 25:09
  Nik Milanović: How do banks think about moving past this?
• 25:11
  Jacqueline Reses: I I think they will move past it.
• 25:13
  Jacqueline Reses: It'll be like when when um when machines are wildly operating in excess of humans, you will be damn sure that banks are going to allow access.
• 25:26
  Jacqueline Reses: Having said that, today, banks have ultimate liability.
• 25:30
  Jacqueline Reses: Today, we are not ready for pure agenda commerce with humans not in the loop.
• 25:36
  Jacqueline Reses: And so I think there is more work to be done in the immediate future in order to make that safe.
• 25:42
  Jacqueline Reses: That's where I go back to.
• 25:44
  Jacqueline Reses: Everyone is comfortable with the idea of created creating a bounded authority around an amount that you're willing to transact with.
• 25:54
  Jacqueline Reses: In my mind, the best parallel is like a prepaid debit card, right?
• 25:59
  Jacqueline Reses: You're creating a prepaid debit card, you go pay.
• 26:02
  Jacqueline Reses: But I don't know that everyone in this room wants agents coming into your bank account without your authority and without the authority controlled, and then data protection managed.
• 26:17
  Jacqueline Reses: How do you know that it's not going to go just publish on your financials, give away all your PII?
• 26:22
  Jacqueline Reses: And then how do you revoke the credentials to get access to your bank?
• 26:26
  Jacqueline Reses: And so all of those reasons are reasons that I frankly don't blame banks who manage people's money today because the container for people's money, an account, isn't ready for prime time around agenda control.
• 26:43
  Jacqueline Reses: We're just not there yet.
• 26:44
  Jacqueline Reses: And so until we get there, I actually think I'd want that controlled also.
• 26:50
  Jacqueline Reses: Now, until we get there, that is my statement, because I want to get there as soon as humanly possible.
• 26:56
  Jacqueline Reses: I want to get there legally and I want to get there product-wise.
• 27:00
  Jacqueline Reses: And I think shutting it off today is great.
• 27:04
  Jacqueline Reses: Shutting it off nine months from now, or whatever is the time frame that makes the most sense, I see as uh a total failure state of the banking system because we're gonna cut off the broadest state of commerce activity that's going to exist in the future.
• 27:21
  Jacqueline Reses: It's it's not gonna be the way that we're gonna operate.
• 27:24
  Nik Milanović: Head in the sand will not work long term.
• 27:26
  Nik Milanović: But no, it won't.
• 27:27
  Nik Milanović: Let's talk about what it'll take to actually get there.
• 27:29
  Nik Milanović: I feel like there's two genres of answer to that question.
• 27:32
  Nik Milanović: One is the product component, one is the regulatory framework.
• 27:36
  Nik Milanović: In your perspective, from a product side, from a regulatory side, what's needed to actually get to a place where banks can safely allow MCP access.
• 27:43
  Jacqueline Reses: On the product side, it is this idea of controls, um, understanding authority, revocability.
• 27:52
  Jacqueline Reses: Like if I could pick three issues, those are three biggies, right?
• 27:57
  Jacqueline Reses: You need to know who has control, how it's controlled, what authority it has, and then when that access gets pulled.
• 28:06
  Jacqueline Reses: You need to know data security.
• 28:08
  Jacqueline Reses: So I could list about 10 sets of programmable behaviors that need to be included into a protocol for agents that would enable us to be able to program agents to have access that feels safe.
• 28:25
  Jacqueline Reses: None of that technology is rocket science.
• 28:29
  Jacqueline Reses: And even if it were rocket science, we'd still figure it out.
• 28:32
  Jacqueline Reses: But it is not that complicated to build.
• 28:35
  Jacqueline Reses: I think we're still settling around standards, and lots of people have put stakes in the ground around what standards should be used for agenda commerce.
• 28:42
  Jacqueline Reses: I think that's amazing.
• 28:44
  Jacqueline Reses: Amazing.
• 28:45
  Jacqueline Reses: But those standards need to be established and momentum needs to develop behind them.
• 28:51
  Jacqueline Reses: And so that's on the product side because all of those issues that I just talked about are absolutely critical in order to make it safe.
• 28:59
  Jacqueline Reses: Like, I don't think you want my agent, which is called Pork Chop, to be able to access your um your system with unbounded control based on me probing around, seeing what's going on in your bank account.
• 29:18
  Jacqueline Reses: I think you'd be happier if Pork Chop were to buy another pair of new balance sneakers for you.
• 29:24
  Nik Milanović: Yeah, well, that sounds like the new family pet.
• 29:26
  Nik Milanović: I feel like our family pet only ruins my new balance sneakers right now, so that might still be a step up.
• 29:31
  Nik Milanović: Um, on the regulatory side, how do you think about what's the you know, the United States is in a place right now where we're not that effective at putting together legislation that has to deal with emergent technologies.
• 29:43
  Nik Milanović: What do you think the path forward looks like for regulators to be able to actually harmonize?
• 29:48
  Jacqueline Reses: So I agree.
• 29:49
  Jacqueline Reses: That's why we wrote this actually, because I think um half of it's regulatory.
• 29:57
  Jacqueline Reses: And so there are a lot of issues that regulators can tackle.
• 30:00
  Jacqueline Reses: And the Fed was talking about this.
• 30:03
  Jacqueline Reses: I went to a Fed event on Agentic Commerce maybe six months ago, and we started having the conversation around what's needed.
• 30:11
  Jacqueline Reses: We then have gone and talked to all the regulators about it, and they're able to actually put some of this into practice very quickly.
• 30:20
  Jacqueline Reses: They've actually gone and requested information, taken market perspectives.
• 30:24
  Jacqueline Reses: And so we actually can get very far through creating some safety nets that are done on a regulatory perspective.
• 30:32
  Jacqueline Reses: As it relates to laws, I actually think financial services committees are unusually capable of breaking through the politics, particularly for an issue this important, where I actually think there's a lot of hope that we will be able to do it in a very narrow vertical of banking because of the importance of it to the financial system.
• 30:58
  Jacqueline Reses: And so that's why I have a lot of optimism around being able to execute on some new laws and regulations that support what all of us need to scale agentich payments.
• 31:12
  Nik Milanović: Well, I know that we're uh getting a time check here, and I have a hundred more questions, but I'll stick to two of them.
• 31:18
  Nik Milanović: First, um, with everything that we talked about today, how is Lead working on pushing this forward?
• 31:24
  Nik Milanović: How is Lead working on making agentic stablecoin-based um financial services more accessible through and platforms to end users?
• 31:32
  Jacqueline Reses: So we're lucky we have the most amazing clients we could ever ask for.
• 31:36
  Jacqueline Reses: Like absolutely the best.
• 31:39
  Jacqueline Reses: And so we have what I describe as the world's best stablecoin-related companies as clients.
• 31:47
  Jacqueline Reses: And we've been building stablecoin and digital asset-related infrastructure for several years.
• 31:53
  Jacqueline Reses: I think we are also very lucky in that we could listen to what the needs are of our clients and build our roadmaps based on what our clients need.
• 32:02
  Jacqueline Reses: So as quickly as we could build, we have products and services that our clients want, and we're going to continue to build out a stablecoin-centric and agentix-centric roadmap for our clients.
• 32:16
  Jacqueline Reses: Um, you know, we're not so good on the PR front.
• 32:19
  Jacqueline Reses: We're not so good on the SISL front.
• 32:22
  Jacqueline Reses: Uh, like I describe us as like the Girl Scouts of what we do.
• 32:27
  Jacqueline Reses: We put our head down, we do good work, we launch it to our clients.
• 32:32
  Jacqueline Reses: We, you know, we get a lot of inbounds.
• 32:35
  Jacqueline Reses: We really haven't even had much of a sales team.
• 32:37
  Jacqueline Reses: We have to go hire a go-to-market lead if anybody knows anyone, great.
• 32:42
  Jacqueline Reses: Um, but we don't even have a go-to-market team that um, so we're we're gonna build one.
• 32:50
  Jacqueline Reses: Um and so everything has been inbound based on the relationships and needs of clients who see how we operate with our clients, they see what we build.
• 33:00
  Jacqueline Reses: And I think we're lucky that we have an incredible, incredible word of mouth.
• 33:04
  Jacqueline Reses: Now, sometimes we screw stuff up, which is unfortunate.
• 33:08
  Jacqueline Reses: Um, but when we do, we fix it.
• 33:10
  Jacqueline Reses: And my girl scaldy ways, we go, we apologize, we change it, um, and then we build better products.
• 33:18
  Jacqueline Reses: Um, and so I think we have a pretty workhorse ethos in the way that we build for our clients that is very understated and um gets the job done.
• 33:30
  Nik Milanović: Well, I think it's better to be in the steak business and the sizzle business at the end of the day.
• 33:34
  Nik Milanović: And you know, it's 2026.
• 33:35
  Nik Milanović: I feel like when we're we're talking now, you're talking about uh stablecoin interested clients being the primary client vertical, but I feel like what Lead is building is really something that will be core infrastructure for any large platform where money is moving.
• 33:50
  Nik Milanović: So, like Ticketmaster, Disney, Walmart, these are companies that process incredibly high, incredibly complex transaction volumes.
• 33:58
  Nik Milanović: And it feels like the core underlying digital payment agentic infrastructure that Lead's building is something that all these platforms should be referencing.
• 34:05
  Jacqueline Reses: I agree.
• 34:06
  Jacqueline Reses: So we actually work with Walmart through OnePay.
• 34:10
  Jacqueline Reses: Um, and you could find us on Amazon and Apple through a firm.
• 34:14
  Jacqueline Reses: Um, you'd never know it though until you look at the transaction.
• 34:19
  Nik Milanović: Um all stake, no says all.
• 34:22
  Jacqueline Reses: Um but I think that's right.
• 34:24
  Jacqueline Reses: It uh and it really depends on the client because it depends what infrastructure they have.
• 34:29
  Jacqueline Reses: Because sometimes working with other partners first makes more sense depending on what infrastructure they have.
• 34:35
  Jacqueline Reses: Sometimes coming direct to lead makes tons of sense because of the infrastructure of a particular product we might have.
• 34:42
  Jacqueline Reses: We have we have clients from all over the world.
• 34:45
  Jacqueline Reses: And so we're lucky we have a huge business in Latin America, we have a huge business in Europe.
• 34:50
  Jacqueline Reses: Um, and so we're kind of off to the races.
• 34:54
  Jacqueline Reses: And uh again, head down, we just do the work and we listen to what our clients want and help build a roadmap that seems to be resonating around the lines of stablecoin infrastructure and now agentic infrastructure.
• 35:09
  Jacqueline Reses: The other thing we did is that anything our clients need from an agentic point of view, they're gonna be able to use the APIs they currently have.
• 35:17
  Nik Milanović: Well, three last quick things for people in the room before we wind down today.
• 35:22
  Nik Milanović: One, where can they find you and the lead team at the show this week?
• 35:26
  Nik Milanović: Two, any critical hires you're looking to make that we should be thinking about?
• 35:29
  Nik Milanović: And three, what are you most excited for in the next year?
• 35:31
  Jacqueline Reses: So we sit, what do you call this floor?
• 35:34
  Nik Milanović: Uh St.
• 35:35
  Nik Milanović: Mark's Square.
• 35:36
  Jacqueline Reses: St.
• 35:36
  Jacqueline Reses: Mark's Square at Canaletti Restaurant.
• 35:41
  Jacqueline Reses: We sit at, I think that's the name of it.
• 35:43
  Jacqueline Reses: Um, we sit in a corner, we're easy to find, we're always there.
• 35:49
  Jacqueline Reses: Anyone can come by and say hello.
• 35:52
  Jacqueline Reses: And um we're here through Wednesday.
• 35:56
  Nik Milanović: All right, y'all.
• 35:57
  Nik Milanović: Canaletti restaurant, Jackie Reese's CEO, founder, and chairman of Lead Bank.
• 36:02
  Nik Milanović: Thank you so much for joining us.